Illinois' public universities are next in line for a credit review.
Moody's Investors Service announced last week that it will review credit at seven Illinois universities. Moody's will review the University of Illinois, Illinois State University, Southern Illinois University, Northern Illinois University, Governors State University, Northeastern Illinois University and Eastern Illinois University.
Diane Viacava, Moody's lead analyst for higher education, said all seven schools are being reviewed for a possible downgrade. But the focus will be on Governors State, Northeastern and Eastern Illinois.
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Viacava said Eastern Illinois University's debt is “below investment grade,” or junk. And Governors State and Northeastern are only one step better.
Viacava said the review is primarily a credit review and not a pronouncement on the universities. “Should parents be concerned? These colleges are open for business. They are educating. They're accepting applications, they are enrolling students for the upcoming fall class, ... and they're graduating students.”
Jim Applegate, executive director of the Illinois Board of Higher Education, said that could change if the budget impasse continues. “If we don't get a budget here in the next few months, I think it's going to be very difficult for some of our institutions to continue to operate.”
Viacava said Illinois' universities are being reviewed because of their reliance on state dollars. Illinois doesn't have a budget, and Moody's downgraded Illinois' credit in June because of it.
Moody's said Western Illinois University is not on the list because the school hasn't asked for a credit review.